Presidential candidates Hillary Clinton and Donald Trump. Win McNamee / Getty Images
Presidential candidates Hillary Clinton and Donald Trump. Win McNamee / Getty Images
Presidential candidates Hillary Clinton and Donald Trump. Win McNamee / Getty Images
Presidential candidates Hillary Clinton and Donald Trump. Win McNamee / Getty Images

Truth and trust are the great casualties of 2016


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What have been the biggest casualties in the US presidential election so far? Civil war is already breaking out in the Republican party, and come 2017 the GOP might find itself in control of neither the White House nor the Senate, and may lose the House as well.

Some commentators have identified civility as being a quality in political discourse that has been damaged beyond repair by this year’s battle. After Donald Trump’s “locker room talk” and his attempts to exploit skeletons in Bill Clinton’s cupboard, that may well be true.

But what we are in danger of losing, not just in America but in many countries, is of far greater consequence. For trust and the truth itself appear to play ever diminishing roles in politics across the continents. In the United States it is not just that the electorate is faced with two candidates they don’t believe to be honest and trustworthy (with 67 per cent taking that view of Mrs Clinton and 62 per cent of Mr Trump in one poll over the summer).

Old fashioned facts also seem to be losing their underpinnings and importance. Did Mr Trump support the Iraq war before he turned against it? The evidence is that he did, albeit somewhat hesitantly. But he insists he was always against it; and in his universe that is a fact, and one that his supporters accept as such. It is no longer germane to talk of something having the ring of truth – the ring of “truthiness”, as the American satirist Stephen Colbert puts it, is what now matters.

Leave aside the gormless credulity of those who believe everything they read on the internet or social media. The stretching of the truth and the broadcasting of outright lies has been going on for years in America.

Right wing commentators have long accused politicians they deem insufficiently conservative of voting for tax hikes, when they merely cast their ballot to continue a levy with a sunset clause. Since the rate never goes up, it cannot logically be a hike. But this distorted version of the truth is taken for the real thing by many, and its proponents shamelessly persist in their falsehoods.

In the 2004 election a group called the Swift Boat Veterans for Truth may have cost John Kerry the presidency with a smear campaign undermining his record as a Vietnam war hero. Their distortions were contradicted by those who served with him, but the mud stuck, and so extreme is the American attachment to free speech that court rulings have effectively granted a “right to lie” under the US constitution’s first amendment. However, never, before this year, has a presidential candidate availed himself of that right so freely.

And it is not just in America. Britain’s Brexit campaign was marred by wild exaggerations on both sides, but the “Leave” campaign’s declaration that the UK sends the EU £350 million (Dh 1.6 billion) a week was the most barefaced of lies. No conjuring with semantics could disguise that fact.

All the expert institutions, such as the Institute for Fiscal Studies and the UK Statistics Authority, pronounced it misleading (or “absurd”, in the case of the IFS). But, as the then Conservative cabinet minister Michael Gove said during the campaign, people “have had enough of experts”. They’d rather believe what they’d like to be true instead.

This casually deceitful approach has had other consequences. Across Europe fears of “Eurabia” – a fictitious long-term project of the EU elite to Islamise and Arabise the continent – has stoked Islamophobia and led to the enactment of legislation that would be risible, were it not for the fact that it clearly aims to victimise a minority population.

Thus, Switzerland voted to ban the construction of minarets in 2009 – even though there were only four in the whole country. Earlier this year Latvia proposed a law banning face veils, “for all three women who wear them”, as one tart headline put it.

Deceit can be perpetrated by politicians of all persuasions. It may be noted, however, that all the instances to which I have referred have involved populist politicians and campaigns.

And while there is nothing wrong with populism per se – it can be one of the purest articulations of the democratic will – there is something particularly pernicious about populist deception, precisely because it is so likely to appeal to vast numbers.

In Malaysia, to take another case, the government introduced a goods and services tax, known as GST, last year, in order to broaden the tax base and protect revenue against external shocks. The opposition opposed it, and continues to do so, despite the facts that every reputable economist – including those at the World Bank and the IMF – supported the move, and that countries such as India and Saudi Arabia are following suit.

Malaysia’s opposition parties must know this and they must know that had GST not been introduced there would have been a gaping hole in the nation’s finances because of the plunge in the price of oil, which is a major income stream. But they prefer to try to curry favour by attacking a tax whose imposition was unpopular – even though they know it is necessary.

If truth is the first casualty of war, and politics is war by other means, then perhaps we should not expect to rely on the word of our politicians, still less trust them. Yet they are the tribunes of the people – of us.

If we cannot have faith in those who represent us, the rule of law and our shared institutions are all in danger. Never mind what Donald Trump might do in the White House. America – and the world – has become a less safe place just because of the campaign so far.

Sholto Byrnes is a senior fellow at the Institute of Strategic and International Studies, Malaysia

Ms Yang's top tips for parents new to the UAE
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The five pillars of Islam

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HAJJAN
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Lord Browne, former BP chief executive

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Dr Mark Mann, scientist

Gina MIller, anti-Brexit campaigner

Lord Smith, former Cabinet minister

Sandi Toksvig, broadcaster

 

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Timeline

2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

November 2025

180 Petrofac employees laid off in the UAE

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Favourite film: The Greatest Showman.

Favourite holiday destination: I love visiting Melbourne as I have family there and it’s a wonderful place. New York at Christmas is also magical.

Favourite food: I went to boarding school so I like any cuisine really.

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

HUNGARIAN GRAND PRIX RESULT

1. Sebastian Vettel, Ferrari 1:39:46.713
2. Kimi Raikkonen, Ferrari 00:00.908
3. Valtteri Bottas, Mercedes-GP 00:12.462
4. Lewis Hamilton, Mercedes-GP 00:12.885
5. Max Verstappen, Red Bull Racing 00:13.276
6. Fernando Alonso, McLaren 01:11.223
7. Carlos Sainz Jr, Toro Rosso 1 lap
8. Sergio Perez, Force India 1 lap
9. Esteban Ocon, Force India  1 lap
10. Stoffel Vandoorne, McLaren 1 lap
11. Daniil Kvyat, Toro Rosso 1 lap
12. Jolyon Palmer, Renault 1 lap
13. Kevin Magnussen, Haas 1 lap
14. Lance Stroll, Williams 1 lap
15. Pascal Wehrlein, Sauber 2 laps
16. Marcus Ericsson, Sauber 2 laps
17r. Nico Huelkenberg, Renault 3 laps
r. Paul Di Resta, Williams 10 laps
r. Romain Grosjean, Haas 50 laps
r. Daniel Ricciardo, Red Bull Racing 70 laps

Results

1. Lewis Hamilton (Mercedes) 1hr 32mins 03.897sec

2. Max Verstappen (Red Bull-Honda) at 0.745s

3. Valtteri Bottas (Mercedes) 37.383s

4. Lando Norris (McLaren) 46.466s

5.Sergio Perez (Red Bull-Honda) 52.047s

6. Charles Leclerc (Ferrari) 59.090s

7. Daniel Ricciardo (McLaren) 1:06.004

8. Carlos Sainz Jr (Ferrari) 1:07.100

9. Yuki Tsunoda (AlphaTauri-Honda) 1:25.692

10. Lance Stroll (Aston Martin-Mercedes) 1:26.713,